Advance notice of PRSI changes for computer users

Transcription

1 Information Services Department of Social Protection Social Welfare Services College Road Sligo 2012 Advance notice of PRSI changes for computer users This notice contains rate changes in PRSI announced in the December 2011 Budget. Changes are effective from 1 January Income for PRSI purposes PRSI is calculated on the employee s reckonable pay plus notional pay (or benefit in kind) if applicable. Superannuation payments Employee Superannuation/Pension Payments: PRSI relief for employers on pension contributions made by employees has been fully abolished. Employer Superannuation/Pension Payments: Full relief continues to apply to payments made by employers to their employee s pension. Share-based Remuneration Share-based is subject to employee PRSI only, at the rate of 4%, with effect from 1 January If applicable, it should be included as income when determining the appropriate subclass and when charging employee PRSI. Share-based is not subject to employer PRSI. The employer PRSI element was abolished during It should not be included as income when determining the appropriate subclass and when charging employer PRSI. In some cases this may result in a different subclass for the employer and for the employee. The employer and employee PRSI should be calculated separately and added together as normal. If a different subclass applies to the employee and to the employer, the return must always be made at the employee s subclass. Employee s income thresholds The threshold for employee PRSI remains at 352 a week. Office holders pay PRSI at a rate of 4% on all income, where their income is over 5,200 per annum. They should be returned at Class K. People with a nil liability, such as persons in receipt of occupational pensions should be returned at Class M. The Health Contribution was abolished in As a result of this change, subclasses such as, A2, A5, B2, C2, D2, H2, J2 and S2 no longer exist. Assuming wages/income remain the same, employees returned in 2011 under any of these subclasses should, in 2012, be returned as A1, A4 (if previously returned as A5), B1, C1, D1, H1, J1 or S1. For income of more than 500 a week, Subclass A1, A4, B1, C1, D1, H1, J1, or S1 should be returned. PRSI Classes B, C and D will pay PRSI at 0.9% below 1,443 a week and 4% above 1,443 a week.

2 Employee s PRSI-Free Allowance The PRSI-Free Allowance for employees in Classes A and H with weekly earnings of more than 352 remains at 127 a week and at 26 a week for all employees in Classes B, C and D. For employees paid other than weekly, alternatives to the PRSI-Free Allowance are: Classes A B, C, D Fortnightly Monthly Self-employed PRSI The Class S rate remains at 4% and continues to be payable only on annual income of 5,000 or more. The minimum annual contribution for Class S remains at 253. Employer s PRSI rates There are no changes in employer s PRSI rates. Income bands and subclasses AO A6, A8, BO, CO, DO & HO Weekly 38 to 352 up to and including 352 Fortnightly 76 to 704 * up to and including 704 Monthly 165 to 1,525 * up to and including 1,525 * This threshold only applies to Class A employees, whose total earnings/income, including if appropriate share-based, in each week of the fortnight or month are at least 38. Weekly to 356 Fortnightly to 712 Monthly 1, to 1,543 Weekly to 500 Fortnightly to 1,000 Monthly 1, to 2,167 A7, BX, CX, DX & HX A9 JO, M, SO Weekly to 500 more than 352 up to and including 500 Fortnightly to 1,000 more than 704 up to and including 1,000 Monthly 1, to 2,167 more than 1,525 up to and including 2,167 AX AL A1 and A4 Weekly more than 500 Fortnightly more than 1,000 Monthly more than 2,167 Weekly more than 100 Fortnightly more than 200 Monthly more than 433 This advance notice of PRSI changes for computer users is available on our website at or through our PRSI mailing list. If you wish to add your name to our list, please register at K1

3 PRSI contribution rates from 1 January 2012 Non-cumulative weekly income band PRSI Subclass How much of weekly income Employee % Employer % Including if appropriate sharedbased Excluding sharedbased Employee & Employer % Private and some public sector employments Up to JO* All AO All AX AL First Balance First Balance A1 First Balance Use the following subclasses (A6, A7 and A4) only for approved employees under the Employer s PRSI Exemption Scheme and Employer Job (PRSI) Incentive Scheme. Up to 352 A6 All A7 First Balance A4 First Balance Use the following subclasses for Community Employment participants. Up to 352 A8 All More than 352 A9 First Balance * Class J normally relates to people with reckonable earnings of less than 38 a week (from all employments). However, the following employees are insurable at Class J, regardless of earnings: employees aged 66 or over and people in subsidiary employment. Up to 500 JO All J1 All FÁS Allowance J9 All Office Holders Up to 100 M All More than 100 K1 All Class M relates to people with a nil contribution liability (such as employees under age 16 and persons in receipt of occupational pensions). Occupational Pensions All income M All 0 0 0

4 PRSI contribution rates from 1 January 2012 Non-cumulative weekly income band PRSI Subclass How much of weekly income Employee % Employer % Including if appropriate sharedbased Excluding sharedbased Employee & Employer % Public sector employments Up to 352 BO All BX First Balance First B , Balance Up to 352 CO All CX First Balance First C , Balance Up to 352 DO All DX First Balance First D , Balance Up to 352 HO All HX First Balance H1 First Balance Self-employed (on PAYE system only) Up to 500 SO All S1 All

5 = PRSI relief for employers on pension contributions made by employees has been fully abolished. This does not apply to Civil and Public Service employers who do not pay employer PRSI on the pension levy paid by their employees. = PRSI relief on pension contributions paid by employers remains unchanged. = Share-based is subject to employee PRSI only, at the rate of 4%. = Share-based, where applicable, should be included as income when determining the appropriate subclass and when charging employee PRSI. = Share-based is not subject to employer PRSI. It should not be included as income when determining the appropriate subclass and when charging employer PRSI. = In some cases this may result in a different PRSI subclass for the employer and for the employee. Example: If a Class A employee has weekly pay of 350 and, in a particular week, has gains from sharebased of 30. Employee PRSI is calculated on income of Subclass AL. Employer PRSI is calculated on income of Subclass AO. = Employer and employee PRSI should be added together as normal. If a different subclass applies to the employee and to the employer, the return must always be made at the employee s subclass. = There is no annual earnings ceiling for PRSI for employees. = The Health Contribution was abolished in Important points to note = As a result of this change subclasses such as, A2, A5, B2, C2, D2, H2, J2 and S2 no longer exist. = Assuming wages/income remain the same, employees returned in 2011 under any of these subclasses should, in 2012, be returned as A1, A4 (if previously returned as A5), B1, C1, D1, H1, J1 or S1. = For income of more than 500 a week, subclasses A1, A4, B1, C1, D1, H1, J1 and S1, as appropriate, should be returned. = Subclass A4 applies to those who were previously insurable under Subclass A5. = Class A employees earning between 38 and 352 inclusive a week should be recorded under Subclass AO. = Class A employees earning between and 356 a week should be recorded under Subclass AX. = Class A employees earning between and 500 a week should be recorded under Subclass AL. = Community Employment participants earning 352 or less a week should be recorded under Subclass A8. Subclass A9 applies when earnings are more than 352 a week. = The Class J contribution normally relates to people with reckonable earnings of less than 38 a week (from all jobs). However, a small number of employees are insurable at Class J, regardless of earnings - for example, employees over age 66 and people in subsidiary employment. = For employees taken on under the Employer s PRSI Exemption Scheme and the Employer Job (PRSI) Incentive Scheme: Subclass A6 is applied to employees earning 352 or less a week - normally insurable at Subclass AO. Subclass A7 is for those earning between and 500 inclusive a week - normally insurable at Subclass AX or AL. Subclass A4 applies for those earning over 500 a week. This applies to employees who would normally be insurable at Subclass A1 and exempted employees who were previously insured at Class A5. = Civil and public servants will pay PRSI on the Pension levy portion of their salaries. Civil and public service employers do not have to pay any employer PRSI on the Pension levy. = You can download PRSI information booklets from our website at When completing a P35, P60 or P45, do not include any class or subclass of PRSI that did not apply during the year. This leaflet is intended as a guide only, and is not a legal interpretation. Edition: December 2012